Impact of agribusiness in the development of the country
Agribusiness plays a major role for country development including Rwanda from which there can be success domains and impacts of the agribusiness firms and be optimistic about the country’s status as well as economic liberalization. Rwanda’s agribusiness has been dependent on technical experts and several agriculturists as there has been vulnerable to changes in market and climatic conditions. There can be agriculture globalization impact in succession as development posits the harnessing of agribusiness liberalization in Rwanda. The agribusiness approach to countryside development have certain imparts implying to expand production base as well as raise production and distribution efficiency that are parallel with country development norms as well as promoting in equitable distribution of production and productivity gains of the country. The expansion of the production base involves breaking out from subsistence agriculture by increasing and diversifying the marketable surplus of the farm and increasing price and quality competitiveness of the country’s agricultural products. However, there maybe raising in agricultural and fishery production and competitiveness have not automatically and consistently led to increased farm incomes. Often, more production meant surpluses that depress farm gate prices. Meanwhile, lower farm gate prices also do not automatically lead to lower food retail prices. It appears that an inordinate share of the benefits from higher production goes to middlemen.
Agribusiness Development in Rwanda
Rwanda fell into downward economic spiral compounded by market destabilization and severe food shortages due to systemic deficiencies in agricultural production, distribution and marketing. ACDI/VOCA in Rwanda supports local initiatives in commercial agriculture and agribusiness development through its food security grant fund, which awards grants to rural cooperatives that have submitted viable proposals for agribusiness activities. ACDI/VOCA has also been successful in gaining the cooperation of local banks to match the program grants with commercial loans, thereby linking the cooperative enterprises with the formal financial sector. In addition, ACDI/VOCA helps cooperatives strengthen their business skills and increase their involvement in commercial agricultural markets for both staple and cash crops acting businesses in response to market changes.
The Impacts
The impacts of presenting efforts to develop the agricultural sector in developing countries are now taking place against the background of major structural change in the world agricultural industry. In many developed countries, agricultural production is changing from an industry dominated by country based, small scale farms as tightly aligned across the production and distribution value chain (2000) and led to increased integration of world markets (2000). Although most of impacts in agricultural and food markets are taking place in developed countries, they have far reaching implications for agricultural development efforts in developing countries. The changes in food and agricultural markets from wherein there is industrialization of agriculture which have influenced the need for higher levels of managed coordination. The outcome upon introduction of diverse forms of vertical integration and alliances, which have become dominant feature of agricultural supply chains ( 2000). The need to control for high perishability and safe handling involves specialized production, packing techniques and refrigerated transport, all of which require large capital investments and also investment in research, development and marketing, which small and medium-sized enterprises cannot easily afford. Accepting the diversity in the nature of the agricultural transformation process between countries, the concept of agricultural industrialization describes the significant structural changes in the food and fibre system (2000). The new lifestyles of consumers in the wealthy countries of the north, shifting demographics and a growing appreciation for the link between diet and health have contributed to different eating patterns and influenced the foods consumers in these countries buy. The concern about food safety and the recent food scares as there influencing impact of consumer behavior heavily. The specific needs of consumers have led to the splintering of the mass food market into large number of niche markets. There is then, new technology as there includes information technology as making it possible to ensure that agricultural and food products do have the characteristics consumers want (1995; 2000).
The benefits to the agribusiness firm from contract farming venture revolve mainly around cost reduction, quality control and reduced uncertainty with regard to the supply of raw material. Advantages that are specific to agribusiness firms in developing countries are the substantial political economy gains as a result of involvement in national development projects, or because the government is a party to the contracting arrangement (1994; 1994), where there can translate into more tangible economic benefits resulting from government intervention or cheap credit ( 1994; 1995). The agribusiness firms in developing countries that are not allowed to own land can use contract farming with local farmers to overcome constraints, in parts of Rwanda where multinational agribusiness firms used contract farming to secure a constant flow of commodities for processing and export ventures (1996).
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